View more on these topics

JPMorgan builds global mining on resources capability

JP Morgan Asset Management – Global Mining Fund

Type: Oeic

Aim: Growth by investing globally in the equities of companies involved in mining and related activities

Minimum investment: Lump sum £1,000, monthly £100

Investment split: 100% in the equities if mining and related companies

Isa link: Yes

Charges: Initial 4.25%, annual 1.5%

Commission: Initial 4%, renewal 0.5%

Tel: 0800 727 720

JP Morgan Asset Management is drawing on its natural resources experience to launch the JPM global mining fund.

The fund invests globally in the stocks of 50 to 100 companies involved in mining or mining related activities. It will invest in firms that mine base and precious metals but not in firms involved in the production or extraction of oil and gas.. It will invest in companies of any size that can grow their reserves and production and will also include undervalued mining firms.

Chelsea Financial Services managing director Darius McDermott says: “It would be unfair to accuse JP Morgan of bandwagon jumping for launching this fund two years into a miners’ bull run. It is well established in natural resources investment and this launch is seen as building on that capability.”

McDermott adds that the firm’s highly successful natural resources fund, run by Ian Henderson, includes a portion of mining stocks such as Xstrata and Rio Tinto. It also has exposure to other commodities such as agriculture and energy but the new fund will focus purely on both base and precious metals. “The fund will hold between 50 and 100 stocks with a view to uncovering companies that display strong growth potential in reserves and production. For new investors, the question will be whether the sectors can continue to unearth double digit growth,” says McDermott.

Experience lies at the fund’s core in McDermott’s view. He points out that manager Neil Gregson joined J.P. Morgan Asset Management in 2010, bringing with him over 20 years experience in the natural resources sector.  “He works alongside Henderson on the flagship Natural Resource fund and will be drawing from a deep resources and considerable bank of analysts.”

 Adviser remuneration is seen as in line with other unit trust and Oeics, although normally such specialized funds such as BlackRock Gold and General, charge higher annual management charges.

Turning to the potential drawbacks McDermott says: “I think the fund is very suitable if investors want exposure to miners given the pedigree of the manager. JP Morgan as a highly respected investment house in this space.” But he adds that volatility is serious concern, as with any commodities investment. “ I think twin drivers of emerging market growth and the trend towards urbanisation makes a solid long-term investment case. The real question will be can this fund beat the pre-crash mining highs?”

Considering potential competitors McDermott goes for an investment trust. He says: “BlackRock World Mining Trust is the clear alternative. It has a slightly cheaper annual management charge of 1.3 per cent, as compared with the JP Morgan fund’s 1.5 per cent. It is also trading at a 13.6 per cent discount, despite delivering strong returns. It is up 43.4 per cent over one year and 110 per cent over five years. But given the nature of investment trust this fund may be more volatile.”

BROKER RATINGS

Suitability to market: Good

Investment strategy: Good

Charges: Average

Adviser remuneration: Average

Overall 8/10

Recommended

5

Lower universal pension likely for those who contracted-out

The Department for Work & Pensions and the Treasury are in discussions over plans for a basic universal pension of £100, with an additional £40 for people who have never contracted out of the state second pension or Serps, Money Marketing understands. In a speech on Tuesday, Work and Pensions secretary Iain Duncan Smith (pictured) […]

OTS spares investment bonds

The Office of Tax Simplification has called for Government reviews of inheritance tax and capital gains tax as part of its tax relief review. In its final report on tax simplification, published last week, the OTS also suggests merging income tax and National Insurance, a long-term project it believes would deliver “major simplification”. But the […]

Senior Gartmore trio will not join Henderson

Leading Gartmore fund managers John Anderson, Leigh Himsworth and Dan Roberts will not move over to Henderson after the firm completes it takeover of the firm on April 25. An update on the proposed acquisition of Gartmore shows that most of the managers’ funds will merge into existing Henderson products, while the company confirmed the […]

1

Nine arrested in SFO Kaupthing investigation

Nine men have been arrested in London and Reykjavik this morning in relation to the Serious Fraud Office’s ongoing investigation surrounding the collapse of the Kaupthing banking Group. The FT is reporting that high profile entrepreneurs Vincent and Robert Tchenguiz are among those who have been arrested as part of an investigation into the failed […]

How to use wills to protect your clients’ wishes

March was Free Wills Month! Free Wills Month brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their simple wills written or updated free of charge by using participating solicitors in selected locations around England and Wales. Research by the Law Society* highlighted that only 64 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com